Orme Hardware owner Richard McCoy describes his company’s claim to fame with a simple description: “We still run an old-time hardware store.”
Of course, there’s a lot more to it than that. Certainly, the Do it Best Corp. member with business roots that reach back to 1869 has an old-school flavor — one of the locations still operates with rolling ladders and wooden drawers, but McCoy is not only a recognized “Extreme Retailer,” he’s an innovator and a growth-oriented operator even in today’s contracting times.
One of Orme’s most interesting features lives behind the scenes — a corporate incentive plan that includes every full-time employee, from the sales team to the back-office accountants. Based in Cambridge, Ohio, Orme operates in towns throughout the state and markets that vary from 300 people to about 50,000.
Every store is different in the Orme empire, where stores range from about 5,000 sq. ft. to 10,000 sq. ft. But they all operate under McCoy’s retailing principles:
“We still sell nails by the pound, rope by the foot, and those old-fashioned values that have been with us a long time. We do not operate a cookie-cutter store. We have wine-making and brewing supplies in one store, beekeeping is another one. One of our newest categories is gold panning, and that creates some interesting discussions in the store. We’re not afraid to test things and see what happens.”
On growth through acquisition
“We’re actively looking for new locations. We bought a store two weeks ago. It hadn’t been changed, cleaned or dusted in 30 years. We always clean and dust because we’re proud of our merchandise.
“Most of the stores that we have purchased have been underperforming, undervalued, run down, no inventory. I’ve bought things that nobody else would touch. We’ve gone in and cleaned them up, revitalized the staff, energized the community, fully stocked the stores and have turned these poor performing stores into profitable hardware stores.
“What do I look for? I look for potential. If we see potential in the community and the business, then we go after it. In most cases, I firmly believe every small town needs a good fully servicing hardware store. I just really look for potential.”
On his first acquisition
“It was 4:30 in the afternoon. I stopped by a store, and I talked with the owner for a while. I said, ‘Here’s my card. If you ever think about selling, let me know.’
“ ‘He said, I’m not interested in selling.’ I said, ‘I didn’t think you would be. When the day comes, just call me.’
“At 7:30 a.m. the next morning I got the call.
“I think he went home and talked to his wife. And she said ‘Honey, I think you need to sell this.’ And that was our first acquisition.”
On the all-inclusive incentive plan
“Every year I pick a percentage of profit that we have to make for each store. I don’t pick a number, I pick a percentage of profit. If they hit the goal, nothing happens (but that’s never happened.) If we go above the goal, we split the extra — 50% goes to the employees, 50% stays with the company. Last year we finished in December and had excess of $90,000. So we sat down and wrote a check for $45,000 and passed it out at the Christmas party. And that’s a real incentive.”
On why the incentive works
“The best thing about the whole program is that it incentivizes everybody. From accounts receiving to cashiers. We go through this with all the employees so they know what the profits are. With our new store, one of the employees came up to me and said, ‘How can we help you make the new store profitable?’ Now how many people get asked that question? That’s a wonderful thing to have happen.
“Another thing, we don’t do the stores individually. This is a corporate profit-sharing incentive plan, because I want every store to feel that they are part of the Orme hardware community. And if we need to move merchandise around from store to store, which we know might not be profitable for an individual store to move it, but it satisfies the customers needs and that’s what the company wants.
“For me, it’s as important that the office staff understands profits as well as the person who makes calls on accounts. Maybe they don’t really need a new adding machine. Maybe what we have is fine. The point is, it involves everyone in the company.
On the economy
“It has been a challenge. We have gone through a lot of items and lowered margins to be more competitive in our markets. With gas prices, people are shopping close to home, and that’s been good for our local business. One of the issues in a small town is the perception that the prices are better if you go out to the city. Well, we’re out to prove that that’s not the case.”